Monday, 9 October 2017

What’s next? – GOLD, OIL 09.10.17

Posted by Anonymous at 11:45 Labels:

GOLD

Gold futures rose in early trading hours on Monday as China returned after a week-long holiday, offering investors some action despite Japan, South Korea and Taiwan remain closed.

On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.60 percent higher at $1,282.50 a troy ounce as of 07:15 GMT.

Ahead this week, attention will be directed to the release of Fed minutes on Wednesday and fresh inflation figures on Friday. Both reports are expected to have effects on expectations for further monetary policy changes, especially on the future of interest rates.

According to Fed funds tracked by CME Group’s FedWatch program, investors are pricing in a 91.7 percent chance of a 25 basis points interest rate hike by December.

Another key event on the watch will be a speech from European Central Bank President Mario Draghi. Traders will be searching for hints over potential shifts to its conservative approach.

The yellow settled in green territory on Friday, as renewed concerns in the Korean Peninsula weighed on the US dollar and boosted the safe-haven demand.

The US dollar index, which gauges the greenback against a basket of six major rivals, was trading at 93.66 by the time of this writing.

Gold is a dollar-denominated commodity. A stronger greenback makes the metal more expensive for investors holding foreign currencies.

Earlier, the US Department of Labor said the economy added 33,000 jobs in September. While data came in below expectations and put an end to seven consecutive years of labor market growth, investors understood data was influenced by the effects of Hurricanes Irma and Harvey.

The unemployment rate dropped to 4.2 percent and average hourly earnings increased 2.9 percent year over year.

OIL

Oil futures rose in early trading hours on Monday as market participants focused on fresh reports demand/supply reports in search for direction.

The US West Texas Intermediate crude contracts were 0.22 percent up at $49.40 a barrel by 07:15 GMT. Elsewhere, Brent crude futures were up 0.04 percent at $55.64 a barrel.

The Organization of Petroleum Exporting Countries and the International Energy Agency will be presenting their monthly reports on supply and demand levels later this week.

As usual, attention will also be directed to industry estimates on crude stockpiles by the American Petroleum Institute on Wednesday and official data from the Energy Information Administration on Thursday. Both reports will be out a day later due to Columbus Day holiday.

Investors are also pending on President Donald Trump’s decision on Thursday regarding the multilateral nuclear deal with Iran. Trump should decide whether the nation will be certified for complying with the agreement or not, which could translate into sanctions.

Energy prices dropped on Friday over concerns the oil market is about to deepen its oversupply state. However, news about Tropical Storm Nate approaching the Gulf of Mexico capped losses.

Earlier, oil benchmarks were supported by a meeting between Saudi King Salman and Russian President Vladimir Putin in Moscow. It seems that both leaders spoke about the extension of the current output cuts deal beyond its March 2018 deadline.

OPEC and non-OPEC producers agreed in May to extend the deal for nine months after its first deadline in June 2017. However, cuts volumes remained steady at 1.8 million barrels per day.

The Organization of Petroleum Exporting Countries will meet again on November 30 in Vienna.

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